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“When you’re 70 years old, you need props,” he told the audience in Chicago, before gazing at his own image on the massive screens flanking the stage and pronouncing himself “one cool dude.”

Gross, co-founder and chief investment officer of PIMCO, then raised the issue of the lambasting he has received in the press this year by recalling the tale of The Manchurian Candidate — the movie in which North Korean captors brainwash American soldiers into repeating endlessly their admiration for a heretofore disliked U.S. officer whenever they saw a red queen playing card. He jokingly said he was inviting reporters to a poker game at PIMCO, where he would produce a red queen and have them repeat “Bill Gross is the kindest, warmest, gentlest man…”

Tongue-in-cheek remonstrations of the press aside, Gross then launched into a defense of his Total Return bond fund, which he compared to a Mercedes “that delivers the ride you expect”: better returns than the index with less risk. And belying the perceptions of his negative press, that’s just what PTTRX has delivered this year, he said: higher returns than the index, before fees.

PIMCO can deliver that performance, he said, because of its belief in “template investing,” a belief shared by other great investors like GMO’s Jeremy Grantham and Berkshire’s Warren Buffett. Saying he might be “handing over the keys” to the PIMCO Mercedes, he said his template starts with a “world class, bottom-up research team” that helps build a portfolio that includes ‘Bonds Plus,’ which he called “Treasuries, but which are really corporate bonds in disguise” using interest rate futures and swaps to complement 6- to 12-month floating rate bonds.

The second part of the portfolio is bonds with intermediate maturities, including five-year Treasuries, “which have essentially delivered 30-year Treasury” returns that “roll down a positive yield curve, which is the essence of capitalism. The secret is patience.”

The third part of the portfolio template is to “employ volatility,” such as can be gained through buying 30-year mortgages despite their greater risk: “We’re willing to sleep less and perform more.”

Since 1981, he said, “real policy rates have come down, down and now are negative.” The real rate has a “critical influence” on both stocks and bonds, but a real rate of 1% at the time of the financial crisis “broke the financial markets; cracked the economy.” However, at a 0% real rate, “bonds make sense” and “volatility is dampened.”

Now that the real rate is likely to be in negative territory, Gross says “we expect 3% to 4% returns from bonds; 4% to 5% from stocks,” and PIMCO expects “we’ll have a market where you can take measured risks.” Where will rates go in the future? Gross expects the U.K. will be “first to cut the real rate.”

He closed by thanking the audience for listening to his “late-in-life saga,” before proclaiming that “PIMCO is thriving in 2014. You’d be lucky to buy it; I have.”